Microsoft’s Activision Blizzard acquisition is good for Ubisoft, CEO says

Ubisoft CEO Yves Guillemot said Microsoft’s attempt to buy Activision Blizzard could be seen as a sign that Ubisoft is on the right track with its current business strategy.

While the merger has often been framed as Microsoft trying to buy Call of Duty, Xbox boss Bill Spencer has consistently said the $69 billion deal is primarily driven by the company’s mobile gaming ambitions.

Of course, Activision Blizzard is home to one of gaming’s biggest global brands and a leading live service and PC games — all areas Microsoft is hoping to gain ground on, and Ubisoft is following suit.

During Ubisoft’s first-quarter earnings call on Thursday, Guillemot was asked if he thinks the Activision deal will be a catalyst for more M&A activity in the space, and if so, what his view is on remaining independent in a consolidating industry.

“I think it’s good news that the transaction is done because it really shows the power of IPs and where the industry is going. So, there will be a lot of opportunities for all companies in the future,” he replied.

“And it shows the value of IPs that can now be on console and PC, but also on mobile, and become more global brands, and globally it’s literally everywhere in the world, and that’s a fantastic opportunity.

“Microsoft says the mobile part of the Activision deal is important, so all the investments we’re making to be strong in mobile are aligned with that, so all those elements will help the company’s value grow.”

In January, Ubisoft said it had canceled three unannounced games as it moved to double down on its massive IPs and live services.

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The company said it “faces major challenges as the industry continues to shift towards mega-brands and long-running titles, rather than reaching players around the world, across platforms and business models.”

It said it has spent the past four years trying to adapt its biggest brands (Assassin’s Cry, Far Cry, Ghost Recon, Rainbow Six and The Division) to these converging trends. Although the games from this investment phase have yet to be released, Ubisoft expects them to pay off in the years to come.

For mobile, Ubisoft will release free-to-play games Rainbow Six Mobile and The Division Resurgence when its current fiscal year ends in March 2024.

Two mobile Assassin’s Creed games are also in the works. A mysterious collaboration with Netflix could tie the streaming giant to its upcoming live-action series, while China-set codename Jade will begin closed beta testing next month.

The free-to-play game, codenamed Jade, will be published by Tencent’s Level Infinite division after Ubisoft announced a major strategic partnership with the Chinese company last September.

In April 2022, Ubisoft was reported to be attracting acquisition interest from several private equity firms.

The following month, Guillemot Brothers Ltd., the holding company of Ubisoft’s founders, was said to be considering joining hands with a private equity firm to acquire the company.

“There’s been a lot of talk about consolidation in the industry and especially at Ubisoft,” Guillemot said during an earnings call last May.

“Our overall position is clear and well-informed. As we said last February, we have what it takes to be independent. We have the talent, industrial and financial scale and a large portfolio of powerful IPs to create massive value in the coming years.

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“It has given us a plan to build strategic partnerships with the biggest players in entertainment and technology. Current speculation puts us in a clear view of the true appeal and value of our assets and our ability to create value.